It is not an accurate tool for calculating the value of a currency, but it does give a general idea. We are talking about the Big Mac Index created by The Economist magazine 37 years ago. Taking advantage of the fact that it is sold in most parts of the world, the index takes the price of this hamburger in the United States as a basis and compares it with its price in other countries, which gives us an idea of whether a currency is overvalued or undervalued against the dollar. Do you know which country has the most overvalued currency in June this year according to the Big Mac Index?

ANSWER

Uruguay. Adjusted for each country's GDP, the Uruguayan peso tops the list of the most expensive currencies, with an overvaluation of 46.3%. There are several reasons for the relative strength of the Uruguayan peso: the export boom—the country recorded a historic high in exports in 2022— the high interest rate maintained by the central bank, and the country's political and financial stability, which attracts foreign investment. However, Uruguay is not the only Latin American country with overvalued currencies. Colombia, Mexico, and even Argentina (at the official exchange rate) also appear on the list.